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CHLA Spring 2014

allege is that (1) the defendant made a false representation about a product, (2) the consumer purchased the product in reliance on the misrepresentation, and (3) he would not have purchased the product otherwise. The consumer did not have to separately plead how much he would have paid for the merchandise had he known its true market value. Price advertisements mattered. When a consumer purchased merchandise on the basis of false price information, and when the consumer alleged that he would not have made the purchase but for the misrepresentation, he had standing to sue under the UCL. Thus, the type of drip pricing denounced by the FTC certainly violates the UCL. If a merchant violates the UCL, the statutory remedies consist of: • Restitution (to the injured plaintiff(s)), and disgorgement of illegal profits. • Civil penalties, which may be imposed in actions brought by the Attorney General or by a local district attorney. The maximum penalty in such cases is $2,500 for each violations, and the courts must impose a separate penalty for each violation of the UCL. • Injunctive relief. • Individual and class action lawsuits by private individuals or entities. 26 California Hotel & Lodging Association Spring 2014 From a hotel operations standpoint, the clear messages from the foregoing are: • All hotel operators must clearly define and disclose all fees, surcharges, and other amounts that the property treats as “mandatory,” and which it will intend to add to the room rate. This disclosure has to be made on the hotel’s web site, as well as for reservations made via mail, telephone, fax, e-mail, and any other means. Also, it must be provided to walk-in guests. As one person has put it, all such fees should be “disclosed at the get-go, on page 1 of the booking process.” The key is to make sure that the guest knew about all such fees and surcharges in advance of making the reservation (or booking a room if he/she is a walk-in). • In addition, the disclosure must be large enough and prominently displayed. Merely putting it in the fine print of a hotel’s web site, promotional materials, and the like will serve very little purpose. As the FTC has advised, “While a hotel reservation site may breakdown the components of the reservation estimate (e.g., room rate, estimated taxes, and any mandatory, unavoidable fees), the most prominent figure for consumers should be the total inclusive estimate.” (See “1. Warning Letter” on page 23, emphasis added.) In other words, the FTC says that the disclosures cannot be set out in “fine print” that the consumers will be unlikely to review. HOTEL FEES AND CHARGES  


CHLA Spring 2014
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